SOURCE: Unity Marketing

May 29, 2012 11:30 ET

Oh, HENRYs! Unity Marketing's Annual State of the Luxury Market Report Shows Lower-Income Affluents Have Returned to the Luxury Marketplace

In 2011 the Luxury Consumer Market Dialed It Back After Making 2010 an Extraordinary Year in Terms of Historically High Levels of Consumer Spending; However, Important News for Premium and Accessible Luxury Brands: The Lower-Income HENRY Consumers Have Returned

STEVENS, PA--(Marketwire - May 29, 2012) - After being MIA due to the recession, finally the HENRYs are back, so reveals the just released Unity Marketing's annual state of the luxury market report (http://www.unitymarketingonline.com). The return of these lower-income affluent consumers is cause for celebration for luxury and high-end marketers, as this population makes up in numbers what they might lack in financial firepower.

The HENRYs stand for "High Earners Not Rich Yet" who by the numbers make up 80 percent of the affluent consumer segment. While the typical HENRY consumer can only rarely if ever indulge in core product ranges from ultra high-end luxury brands like Chanel, Louis Vuitton, Hermes, or Gucci, they do support these brands with less costly purchases, such as lipstick from Chanel, small leather goods from Louis Vuitton, etc. And they are a critically important customer segment of such 'accessible' luxury brands as Coach, Ralph Lauren, Tiffany, Kate Spade, Vera Wang, Michael Kors, Restoration Hardware and premium mass brands, like Ann Taylor, Banana Republic, Williams Sonoma, among others.

Unity Marketing's annual report on the state of the luxury market has just been released. The Luxury Report 2012: the Ultimate Guide to the Luxury Consumer Market (http://bit.ly/L0Vus7), provides detail data about the purchase behavior, spending patterns and trends in the market for luxury among the nation's most affluent consumers for high-end and luxury purchases from 2008 through 2011.

"After an extraordinary year marked by sharp growth in luxury spending during 2010, things are returning to a more normal state in the luxury market in 2011," says Pam Danziger, president of Unity Marketing and author of Putting the Luxe Back in Luxury (http://bit.ly/dmxV62). Based upon the results from Unity Marketing's luxury consumer surveys conducted throughout 2011 among over 5,000 affluents with incomes on average of $288,600, key findings from the new study include:

  • Luxury consumer spending peaked in 2010, but dropped back to 2009 levels in 2011 -- The average amount luxury consumers reported spending on luxury has been on the decline throughout 2011, reaching its lowest level in the past three years during the fourth quarter 2011.

  • Ultra-affluent spending on luxuries has been most volatile, as the lower-income HENRYs picked up the pace of luxury spending in 2011 -- Ultra-affluents (i.e. those at the top 2 percent of U.S. households with incomes starting at $250,000) cut their spending by nearly 30 percent from 2010, while the HENRYs (High Earners Not Rich Yet with incomes $100,000-$249,999) increased their spending on luxury by nearly 11 percent from 2009 levels. Even though HENRYs individually have a far lower spending threshold than ultra-affluents, there are nearly ten HENRY households for every ultra-affluent. That is why with a total of 21.3 million households, the HENRY segment is a critically important part of the affluent consumer market, defined as those with incomes in the top 20 percent of all U.S. households.

  • What's Hot, What's Not in Luxury -- In total luxury spending grew only 1.3 percent from 2009 to 2011, with the best performing categories as measured by spending being luxury travel (up 40.8 percent); kitchenware and cooks tools (up 37.5 percent); entertainment (up 33.6 percent); dining (up 26.5 percent) and fashion accessories (up 23.4 percent). By contrast those categories falling most from 2009 to 2011 were luxury kitchen appliances (down 23.9 percent); watches (down 20.1 percent); jewelry (10.2 percent); and furniture, lamps and floor coverings (down 7.3 percent).

Danziger continues, "Last year we were looking for the return of the HENRYs into the luxury market and this year we can say they have returned and are more positive about spending in the future. For example, in 2009 only 18 percent of the luxury consumers surveyed expected to spend more on luxury in the next twelve months; by comparison 26 percent in 2011 predict greater spending on luxury goods and services throughout 2012."

As another positive indicator, Danziger notes that fewer affluent consumers are making changes in their lifestyle due to worries about the economy. Among the most notable positive changes in their lifestyle is that affluent consumers are dining out more often and shopping more frequently. They are less likely to delay purchases and in another indicator of a positive shift in sentiment, fewer affluents are resorting to using coupons to save money.

The new Luxury Report (http://bit.ly/L0Vus7) gives marketers data about trends in what luxury consumers are buying, where they are shopping, how much they are spending and what brands they favor in key categories of luxury. The report shares findings of 5,266 luxury consumers surveyed in 2011 (average income $288,600) and compares results from 2008, 2009 and 2010 to provide a perspective of long term trends in the luxury consumer market.

"We designed the Luxury Report 2012 as both a powerful desk reference and a source for insight into the future trends in the luxury market. The new report provides the kind of detailed facts and figures about the luxury consumer market that will delight data-driven executives. But it also focuses on the mindset and attitudes of the luxury consumer, making it an invaluable tool for luxury brand executives to plan for the future of their changing marketplace," says Danziger.

For Luxury Marketers: This is a report about your customers & your target customers

The Luxury Report 2012 is a compilation of the quarterly luxury tracking surveys that Unity Marketing conducts every three months with 1,000-1,250 affluent consumers who purchased one or more luxuries in the study period. Unity's luxury tracking study is the only longitudinal study of its kind that tracks the luxury consumer market, what they buy, how much they spend.

In addition to providing detail data about affluent consumers' purchases and spending in 22 categories of luxury goods and services, this year's report includes metrics that measure spending by specific product and share of product category spending by retail distribution channel in these key product areas:

Home Luxuries

  • Art and Antiques
  • Home Electronics
  • Furniture, Lamps and Floor Coverings
  • Garden and Outdoor
  • Home Decorating Fabrics, Wall and Window Coverings
  • Kitchen Appliances, Bathroom Equipment and Building Products
  • Kitchenware, Cookware, Housewares
  • Linens and Beddings
  • Tabletop, Dinnerware, Stemware, Flatware

Personal Luxuries

  • Clothing and Apparel
  • Cosmetics, Fragrance and Beauty Products
  • Fashion Accessories
  • Jewelry
  • Watches
  • Wine, Liquor and Spirits
  • Personal Electronics

Automobiles

Experiential Luxuries

  • Dining
  • Entertainment
  • Home Services
  • Spa, Massage, Beauty and Cosmetic Services
  • Travel

The report shows which of the product categories are growing the fastest year-over-year based upon increase in sales and which product categories are dropping at the fastest rates.

This report doesn't stop with the data -- It pushes further to help marketers and retailers put the information to use

Unity Marketing's aim in publishing the Luxury Report 2012(http://bit.ly/L0Vus7) is to translate the data into information that marketing executives can use to make critical strategic decisions. This market research report helps make the research data and findings accessible and useable. It provides marketers with three powerful perspectives: "What," "So What," and "Now What." The report is written to reveal the key research findings, explain why they are important to luxury marketers, and then help marketers find ways to put the research to use in developing new concepts, new strategies, new tactics for success.

Every luxury marketer needs this report on their desk

Click this link (http://bit.ly/L0Vus7) to learn more about the Luxury Report 2012 and to order your copy or call Pam Danziger at 717-336-1600 to discuss your specific research needs.

For media: Danziger available for interviews. Charts, tables and graphs detailing major findings in the report also available.

About Pam Danziger and Unity Marketing

Pamela N. Danziger is an internationally recognized expert specializing in consumer insights for marketers targeting the affluent consumer. She is president of Unity Marketing, a marketing consulting firm she founded in 1992. Pam received the Global Luxury Award for top luxury industry achievers presented at the Global Luxury Forum in 2007 by Harper's Bazaar.

Pam gives luxury marketers "All Access" to the mind of the luxury consumer. She uses qualitative and quantitative market research to learn about their brand preferences, shopping habits, and attitudes about their luxury lifestyles, then turns these insights into actionable strategies for marketers to use to reach these high spending consumers. Unity Marketing is the voice of the luxury consumer for such clients as PPR, Diageo, Tempur-Pedic, Google, Swarovski, Constellation Wines, Luxottica, Orient-Express Hotels, Italian Trade Commission, Marie Claire magazine, The World Gold Council, and The Conference Board

Pam's latest book, Putting the Luxe Back in Luxury, is available now from Paramount Market Publishing (http://bit.ly/dmxV62) . Her other books include Shopping: Why We Love It and How Retailers Can Create the Ultimate Customer Experience, published by Kaplan Publishing in October 2006; Let Them Eat Cake: Marketing Luxury to the Masses -- as well as the Classes, (Dearborn Trade Publishing, $27, hardcover) and Why People Buy Things They Don't Need: Understanding and Predicting Consumer Behavior (Chicago: Dearborn Trade Publishing, 2004).

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